Scottish legal practices vary significantly from those in England and the rest of the UK. That extends to buying property, so if you are from south of the border but looking to move north, it pays to be sure what awaits you. Read on for our guide to buying property in Scotland.
While it is a system that means you will not be gazumped – an owner accepting a higher offer after accepting yours – the Scottish system of bidding on houses can be fraught and at times disappointing.
In the main, asking prices are advertised as ‘offers over’ a certain amount. Each prospective buyer then submits a sealed bid and the seller chooses the one most appealing to them, which is, naturally, normally the highest one.
While this suits sellers, there is very little room for negotiation in this system, meaning buyers can find it tough to achieve value. They can also be left with the nagging doubt that they offered too much or too little for their new home.
The lack of leeway available to a buyer is compounded by the imposition of closing dates. This is essentially a deadline for offers to be submitted, after which prices are not negotiated. Additionally, there are also ‘fixed price’ arrangements where the seller will accept the first offer to match a certain asking price.
Only in situations where there is only one prospective buyer can negotiation take place.
Mortgage in Principle
We would always recommend having your mortgage and conveyancers arranged in principle before putting an offer in on a property, but in Scotland it is a requirement.
In most instances, you need to have a mortgage lender’s confirmation of an offer – a mortgage in principle – for your offer to be considered by a seller. Also, if you want to be kept informed of other parties lodging an offer on a property you are interested in – this notification does not involve details of how much the offer is – your solicitor must ‘note interest’ with the seller.
Some buyers will have a surveyor visit a property to run their eye over it structurally before they put in an offer. Increasingly, though, offers are made subject to surveys, which are then meant to take place within two days of the offer being accepted.
The danger here is really to buyers who choose to play safe. They may reduce their offer as a result of the survey only to find that they have lost out to a bidder who has not had their survey carried out yet.
While at this point the process of moving from an offer’s acceptance to the buyer taking on the ownership of the property is closer to the way things are done in England, the language used is distinct.
Solicitors communicate through missives not letters, and conclude the missives – exchange – once in agreement over terms. This process does tend to be shorter north of the border, taking about a month.
Usually six weeks after this point the settlement sees money exchanged and Disposition documents – title deeds – signed. Stamp Duty is paid and the deeds logged with the Land Registry.